Mexico's 2017 Industrial Production Fell on Oil, Construction

MEXICO CITY--Mexican industrial production contracted moderately in 2017 as lower oil and gas output and a decline in construction activity were partly offset by gains in manufacturing.

Industrial production fell 0.6% in 2017, following a 0.4% increase the previous year, the National Statistics Institute said Friday.

A 10.3% drop in oil and gas production was the main cause of last year's decline. State oil company Petroleos Mexicanos produced an average of 1.95 million barrels a day of crude oil in 2017, compared with 2.15 million barrels a day in 2016. Its natural gas production fell 12.5% to 5.068 billion cubic feet per day.

Construction activity fell 1%, mainly because of the impact that government budget cuts had on public infrastructure works, which were down 10%. That was offset by more private construction.

"Private investment projects like shopping malls, hotels, warehouses, as well as some manufacturing facilities, were supported by growth in consumption and improved manufacturing activity," the country's biggest cement maker Cemex said Thursday in reporting its fourth-quarter financial results.

Manufacturing rose 2.9% in 2017, bolstered by record output of cars and light trucks and gains in the production of computer equipment and electronic goods. Food processing, the country's largest manufacturing sector, grew 1.6%

December's industrial performance showed some positive signs, with overall output up 0.9% seasonally adjusted from November, including a 3.7% rebound in construction activity and a modest increase in manufacturing. Output was 0.7% below December 2016 levels.